How low can we go? 30 yr fixed at 3.75% with no fees...

[Ready2Downsize]

None of us has some magic crystal ball. I can tell you though when we bought our first place inflation was high. Interest rates were high. Prices were rising quickly. My in laws told us we were idiots to buy a townhome and no one would ever buy it from us because houses were the only way to go and besides that Fullerton was just way too hot and no one in their right mind would ever go there. LOL!

We were young and probably dumb but we could see the thought of ever owning a place of our own was slipping rapidly from our reach and bought that townhome. We lived pay check to pay check. I wrote the dates the bills were due/slash the last day I could mail them to get them to the right place on time to avoid penalties. I used coupons because i HAD to.

We kept the place for one year and my new hubby said he heard prices went up and wanted to sell it and buy a big house. Rates were even higher, prices were higher and interest rates were too. We sold it for 24% more than we bought it for and bought the biggest place we could. We moved down the 5 to Orange because we couldn't afford Irvine.

How did we get a place that much more? INFLATION helped our wages immensely. Still living paycheck to paycheck but we had a place that was OURS. No one could take it as long as we made our payments. No one was going to raise our rent.

It turns out we sacrificed when we were younger but it was a really smart move on our part.

 

[irvinehomeowner]

None of us has some magic crystal ball. I can tell you though when we bought our first place inflation was high. Interest rates were high. Prices were rising quickly. My in laws told us we were idiots to buy a townhome and no one would ever buy it from us because houses were the only way to go and besides that Fullerton was just way too hot and no one in their right mind would ever go there. LOL!

We were young and probably dumb but we could see the thought of ever owning a place of our own was slipping rapidly from our reach and bought that townhome. We lived pay check to pay check. I wrote the dates the bills were due/slash the last day I could mail them to get them to the right place on time to avoid penalties. I used coupons because i HAD to.

We kept the place for one year and my new hubby said he heard prices went up and wanted to sell it and buy a big house. Rates were even higher, prices were higher and interest rates were too. We sold it for 24% more than we bought it for and bought the biggest place we could. We moved down the 5 to Orange because we couldn't afford Irvine.

How did we get a place that much more? INFLATION helped our wages immensely. Still living paycheck to paycheck but we had a place that was OURS. No one could take it as long as we made our payments. No one was going to raise our rent.

It turns out we sacrificed when we were younger but it was a really smart move on our part.

And that's why I say... if you can afford it and know the risks/math and how long you are staying, almost any time can be a good time to buy because ownership has intangible worth that renting may not have for some people.

 

[Liar Loan]

And the month is only half over...

Mortgage Rates Explode Higher by 1/8 Point Three Times in March

If you failed to lock in a good mortgage rate earlier this year, it's too late now.

Since the beginning of the year, rates have risen from 3.27% to 4.41%. That a jump of 1.14%, just over one-and-an-eighth points.

Could it Get Worse?  Yes, especially if the Fed starts unloading its balance sheet starting with mortgage-backed securities (MBS).

https://mishtalk.com/economics/mortgage-rates-explode-higher-by-1-8-point-three-times-in-march

 

[irvinebullhousing]

Nice, keep it coming. It would be a true test to see which area holds values.

First place to tank is people living on leverage and high loan balance that can't service their debts. FED is out of ammo for a helping hand.

 

[Cares]

Even more incentive for those with 2-3% loans to stay put and never sell. I'm likely never going to sell my investment properties until retirement because they are sub-3%. The benefits of a 1031 would not be attractive enough for me to make a move. For something like a $750,000 loan the difference could be almost $1,000 per payment.

 

[Ready2Downsize]

Even more incentive for those with 2-3% loans to stay put and never sell. I'm likely never going to sell my investment properties until retirement because they are sub-3%. The benefits of a 1031 would not be attractive enough for me to make a move. For something like a $750,000 loan the difference could be almost $1,000 per payment.

This happened to my mom's generation. She had a 7% loan and a house that was probably 7 years old. My parents wanted to move to Irvine when it was new but the higher interest rates made the payments MUCH higher they were fine with higher prices, because of inflation) so they never moved.

In those days there was lots of new homeowners moving to the OC and lots of land, so no one needed resales. IMO, the ultra low rates of so many years is going to be a real drag on convincing anyone to sell their properties. They would probably rather rent them out if prices continue higher and they want another property.

 

[The Motor Court Company]

don?t forget prop 13. with low fixed rate mortgage, property tax locked in, rising rent it will be easier for investment property that were acquired prior to 2020 to cash flow. this disincentivizes selling, and house price will appreciate faster than inflation, so the capital gain will be good too.

 

[Liar Loan]

Even more incentive for those with 2-3% loans to stay put and never sell. I'm likely never going to sell my investment properties until retirement because they are sub-3%. The benefits of a 1031 would not be attractive enough for me to make a move. For something like a $750,000 loan the difference could be almost $1,000 per payment.

It's a double-sided coin though.  You have a removed one unit of inventory from the market, but there are many active buyers that can no longer afford that $1,000 increase in payment.  They either need to substitute down or drop out of the search.  Since supply tends to be a little more stable due to owners needing to sell for life reasons, and demand tends to fluctuate more dramatically based on economic conditions, I believe the net impact will be a drag on prices and eventually a price decline when the next recession hits.

IMO, the ultra low rates of so many years is going to be a real drag on convincing anyone to sell their properties. They would probably rather rent them out if prices continue higher and they want another property.

This will keep a lid on rents and incentivize new investors to stay out of the market in favor of higher yielding assets.

don?t forget prop 13. with low fixed rate mortgage, property tax locked in, rising rent it will be easier for investment property that were acquired prior to 2020 to cash flow. this disincentivizes selling, and house price will appreciate faster than inflation, so the capital gain will be good too.

Wishful thinking.  Prices can only rise if buyers can afford to buy.

 

[morekaos]

Thank god. Just closed a 3% cash our refi with our credit union.  Checked this morning and same loan is at 3 5/8%.  Locked just before the rates started to rise.  With inflation and tax benefits we are being paid to live on the water.

Wow, that same loan is now at 4 1/8 at the credit union....life is good!!

 

[irvinebullhousing]

For the first time in a long time, we have just a little bit more rental homes on the market vs. homes for sale in Irvine.

When you compare the single family home and town home of available rental and home for sale is nearly identical, 120 unit avaiable for rent vs 122 unit available for sale. I want to eliminiate apartments and only focus on SFH and Townhome/Condo and the # is dramatically low for the entire city of Irvine. Think about it, we have over 300,000 residence in the City of Irvine and have less than 250 unit available?

Assume we will have 5 % mortgage rate at the end of the year, for people who takes out mortgage today at 4.5 % with adjustable rate, and extreme aggressive with their leverage their first adjustment will occur on 2027. What we will have is dragflation and stagnation. Demand slow, and owners disincentivise to sell and giving up their "lock-in" low rate.

Even Elon suggest in today inflation, the best to keep is tangible asset. If you can live in it, hold it, drop it on your feet and hurts, it worth keeping. Ivy Zelman did admit that even with high prices, people would not want to give up their low mortgage and stable homes.

 

[usctrojancpa]

Even more incentive for those with 2-3% loans to stay put and never sell. I'm likely never going to sell my investment properties until retirement because they are sub-3%. The benefits of a 1031 would not be attractive enough for me to make a move. For something like a $750,000 loan the difference could be almost $1,000 per payment.

It's a double-sided coin though.  You have a removed one unit of inventory from the market, but there are many active buyers that can no longer afford that $1,000 increase in payment.  They either need to substitute down or drop out of the search.  Since supply tends to be a little more stable due to owners needing to sell for life reasons, and demand tends to fluctuate more dramatically based on economic conditions, I believe the net impact will be a drag on prices and eventually a price decline when the next recession hits.

IMO, the ultra low rates of so many years is going to be a real drag on convincing anyone to sell their properties. They would probably rather rent them out if prices continue higher and they want another property.

This will keep a lid on rents and incentivize new investors to stay out of the market in favor of higher yielding assets.

don?t forget prop 13. with low fixed rate mortgage, property tax locked in, rising rent it will be easier for investment property that were acquired prior to 2020 to cash flow. this disincentivizes selling, and house price will appreciate faster than inflation, so the capital gain will be good too.

Wishful thinking.  Prices can only rise if buyers can afford to buy.

Well, I've heard that some people are getting some pretty sizable salary increases due to inflation and a hot labor market so if incomes keep rising that'll somewhat cancel out the rate increases.

 

[sleepy5136]

Even more incentive for those with 2-3% loans to stay put and never sell. I'm likely never going to sell my investment properties until retirement because they are sub-3%. The benefits of a 1031 would not be attractive enough for me to make a move. For something like a $750,000 loan the difference could be almost $1,000 per payment.

It's a double-sided coin though.  You have a removed one unit of inventory from the market, but there are many active buyers that can no longer afford that $1,000 increase in payment.  They either need to substitute down or drop out of the search.  Since supply tends to be a little more stable due to owners needing to sell for life reasons, and demand tends to fluctuate more dramatically based on economic conditions, I believe the net impact will be a drag on prices and eventually a price decline when the next recession hits.

IMO, the ultra low rates of so many years is going to be a real drag on convincing anyone to sell their properties. They would probably rather rent them out if prices continue higher and they want another property.

This will keep a lid on rents and incentivize new investors to stay out of the market in favor of higher yielding assets.

don?t forget prop 13. with low fixed rate mortgage, property tax locked in, rising rent it will be easier for investment property that were acquired prior to 2020 to cash flow. this disincentivizes selling, and house price will appreciate faster than inflation, so the capital gain will be good too.

Wishful thinking.  Prices can only rise if buyers can afford to buy.

Well, I've heard that some people are getting some pretty sizable salary increases due to inflation and a hot labor market so if incomes keep rising that'll somewhat cancel out the rate increases.

With the nasdaq in bear market territory, if the slump becomes longer, I foresee there may be layoffs for higher income earners in these tech firms. The fed may also have no choice but to increase rates and if increased too aggressively, the market could go into a recession. That would be the scenario that would lead to potential slowdown in RE is my guess.

 

[Ready2Downsize]

Even more incentive for those with 2-3% loans to stay put and never sell. I'm likely never going to sell my investment properties until retirement because they are sub-3%. The benefits of a 1031 would not be attractive enough for me to make a move. For something like a $750,000 loan the difference could be almost $1,000 per payment.

It's a double-sided coin though.  You have a removed one unit of inventory from the market, but there are many active buyers that can no longer afford that $1,000 increase in payment.  They either need to substitute down or drop out of the search.  Since supply tends to be a little more stable due to owners needing to sell for life reasons, and demand tends to fluctuate more dramatically based on economic conditions, I believe the net impact will be a drag on prices and eventually a price decline when the next recession hits.

IMO, the ultra low rates of so many years is going to be a real drag on convincing anyone to sell their properties. They would probably rather rent them out if prices continue higher and they want another property.

This will keep a lid on rents and incentivize new investors to stay out of the market in favor of higher yielding assets.

don?t forget prop 13. with low fixed rate mortgage, property tax locked in, rising rent it will be easier for investment property that were acquired prior to 2020 to cash flow. this disincentivizes selling, and house price will appreciate faster than inflation, so the capital gain will be good too.

Wishful thinking.  Prices can only rise if buyers can afford to buy.

Well, I've heard that some people are getting some pretty sizable salary increases due to inflation and a hot labor market so if incomes keep rising that'll somewhat cancel out the rate increases.

With the nasdaq in bear market territory, if the slump becomes longer, I foresee there may be layoffs for higher income earners in these tech firms. The fed may also have no choice but to increase rates and if increased too aggressively, the market could go into a recession. That would be the scenario that would lead to potential slowdown in RE is my guess.

OR, we could rally to a new high and then 10-20 years of misery which is my bet.

SP 500 broke the down trend line today........... low volume but did break it nonetheless. Keep tight stops.

 

[sgip]

I keep expecting to wake up seeing "blood in the streets" - a meltdown of some kind that creates the next big buying opportunity, but so far... nada.

 

[irvinebullhousing]

I keep expecting to wake up seeing "blood in the streets" - a meltdown of some kind that creates the next big buying opportunity, but so far... nada.

If a missed fire land on NATO sovereignty soils and kill any troops, that will certainly be the trigger. Or Pootin frustration with the progress and resort to the big red buttons, that will do it.

So far whatever he threaten he followed through.

Really good docu
https://youtu.be/kSNo2FPQDQw

 

[Cares]

I like that the title of this thread is relevant now...some people are wishing they could get 3.750% for no fees now.

 

[Ready2Downsize]

I keep expecting to wake up seeing "blood in the streets" - a meltdown of some kind that creates the next big buying opportunity, but so far... nada.

Stocks go down when rates go up three times........ three steps and a stumble.

One .25% move is doing what for inflation? What is 6 more going to do which is at least partly priced in?

Even a gradual move up of 2% with inflation of 6, 8, 10 or whatever percent means what? Most likely it will do nothing. Inflation in the 70's roared for many, many years before Volker came along.

Time wise, it's been a good time to bottom even though the percent could have been better. Earnings might see a move lower.

 

[sgip]

The shiat's likely to hit the fan when student loan repayment starts and many COVID era assistance programs begin to wind down in the next 60 days.

What might keep all of these COVID period forbearance plans from going away?  Putin's war extending into a NATO country . A 20 or greater% down Bear Market in stonks. A government test of their earthquake generating machine goes wrong.  A newly found COVID varient blooms again... wait... back up one. It would have to be something pretty big to keep these schemes ongoing at least until mid-November.

After that? Efff you 13th Century French Poetry / Marine Biology dual majors - start paying your student loans back!! Same with all the rent squatters - out on the streets you go. By then the Fed will have completed most of their rate increases and who knows what the rate / economic landscape will look like!

What a time it is to be alive!

 

[freedomcm]

How rapidly is the Fed going to sell the 8T of bonds they hold?

How will that affect the mortgage interest rates?

 

[sgip]

Well...( Shakes Magic 8-Ball....)

Ummm.... "Cannot predict now" is the best answer anyone can offer regarding these questions.